Actuary
What Does Actuary Mean?
An actuary is a professional statistician who calculates the risks associated with insurance coverage, as well as the likelihood that claims will be filed or benefits will need to be paid out. Using relevant statistical data, actuaries also determine dividends and set premium rates.
Insuranceopedia Explains Actuary
Actuaries need expertise in mathematics, statistics, and economics to effectively evaluate the risks and returns associated with each insurance product offered. Crucial to an insurance company’s operation and profitability, they help ensure premiums are set at a rate that is both competitive and sufficient to cover the risks of the specific coverage provided. If the rate is set too high, potential customers may be discouraged from purchasing policies. However, if premium rates are too low, the insurance company may struggle to cover all the claims filed by policyholders.
